Russia in 2010 continued to be governed under the arrangement popularly known as the “tandem.” Prime Minister Vladimir Putin still was seen as the main decision maker, but Pres. Dmitry Medvedev appeared increasingly confident and assertive. Speculation was already rife over which of the two would stand for president in the 2012 election. While Medvedev spoke repeatedly of his determination to modernize and diversify Russia’s resource-dependent economy, there was intense debate within the elite as to whether the economy could be modernized without prior political liberalization. A leading Kremlin official, Vladislav Surkov, set the tone by arguing that democracy was a consequence, not a precondition, of economic modernization and that without strong state control over society, modernization would lead only to instability. Liberals from the Institute of Contemporary Development, a Russian think tank, countered that successful economic modernization could be achieved only once Russia had established effective democratic institutions, such as the rule of law, an independent judiciary, and press freedom. Putin sided with the camp that argued that social stability must be the state’s overriding priority. Medvedev appeared to lean toward the liberal wing, going so far as to warn that “symptoms of stagnation” had begun to appear in Russia’s political life—a reference to the dysfunctional political system of the late Soviet period. However, Medvedev also voiced support for the argument that democratization should be undertaken only with great caution. The strength of the debate led some commentators to speculate that Russia was approaching a crossroads at which fundamental decisions about its future path would need to be taken.

Russian rock musician Yury Shevchuk performs at a rally in Moscow on Aug. 22, 2010, to protest a …

Sergey Ponomarev/AP

An image from a Russian news source captures the grisly aftermath of two deadly explosions in …

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Domestic Affairs

Russia experienced its hottest summer on record. Peat and forest fires in the central and southern regions destroyed entire villages, killing at least 54 people and leaving thousands homeless, while Moscow was enveloped in noxious smog. Both Medvedev’s and Putin’s popularity ratings fell during the fires, despite Putin’s headline-grabbing efforts to douse fires while piloting a firefighting plane. By September, however, the tandem’s ratings had bounced back to their customary high levels.

There were signs during the year that at least some sections of society were becoming increasingly frustrated with Russia’s pervasive corruption and autocratic government. Popular protests took place in many parts of the country. In Kaliningrad 10,000 demonstrators took to the streets in January in the country’s largest rally since the fall of the Soviet Union. Protesters expressed anger at the state of Russia’s economy, demanded the resignation of the regional governor, and shouted slogans against the ruling United Russia party. Public rallies in support of citizens’ right to assemble, as guaranteed by Article 31 of the Russian constitution, were held in Moscow and other large cities on the last day of every month containing 31 days. These gatherings were dispersed by police, sometimes violently, until October, when the authorities allowed the rally to go ahead. Smaller rallies were held elsewhere, including Vladivostok, and for the first time calls were heard for Putin to leave office. Although opposition rallies had taken place when Putin was president, the scale of the Kaliningrad protest in particular caught the Kremlin off guard and led the ruling party to deny the regional governor a second term.

Spring saw Muscovites attaching toy buckets to the roofs of their cars to protest officials’ use of flashing blue lights (migalki) on their vehicles to assert their driving privileges. Official sources said that there were nearly 1,000 migalki in Moscow, but the unofficial number was believed to be much higher. In May one of Russia’s best-known rock musicians, Yury Shevchuk, confronted Putin face-to-face and denounced Russia as a country ruled by “dukes and princes with sirens on their cars.” The authorities were taken by surprise again in the summer when large demonstrations were held against the construction of a road through Moscow’s Khimki forest. In an unusual move, Medvedev responded to the protests by suspending construction and calling for a public hearing.

Whereas the state tightly controlled Russia’s main television channels, the Internet remained largely free from state interference and was emerging as a vital forum for public debate. After graphic images depicting police corruption and brutality were published online in the spring, Medvedev acknowledged that his calls for a clampdown on corruption had failed to produce tangible results. He invited public discussion, on a purpose-built Web site, of a bill on the powers and duties of the police. The bill would include such innovations as individual identification badges worn by police officers, the reading of detainees’ rights, and a boost in police pay. Critics objected that the culture of corruption was so deeply embedded in the police that it would take more than a new law to eradicate it; they said that police officers would not work with colleagues who did not take bribes because then they would not get a cut themselves. Others, however, were impressed by Medvedev’s willingness to take on such a powerful state force, describing it as the first serious reform effort of his presidency.

More controversial was new legislation, signed into law by the president in July, that expanded the powers of the Federal Security Service (FSB; the domestic successor of the Soviet-era KGB). The law empowered the FSB to issue official warnings to individuals who were “creating the conditions” for crimes, and anyone obstructing an FSB officer would face a fine or up to 15 days’ detention. Human rights defenders cautioned that the increasingly powerful FSB would be able to intimidate critics of the Kremlin as the 2011 parliamentary and 2012 presidential elections approached. In December oil tycoon Mikhail Khodorkovsky, who was nearing the end of a prison sentence for tax evasion, was convicted of embezzling from his former oil company, Yukos, and had his sentence extended to 2017. It was widely believed that his imprisonment was politically motivated because Khodorkovsky had backed candidates who had opposed Putin. Ella Pamfilova, head of the presidential council for promoting civil society and human rights, announced her resignation. Without blaming Medvedev personally, Pamfilova warned that the neglect of human rights could imperil Russia’s modernization, which, in her view, was “unthinkable” without genuine democracy. She expressed satisfaction when Medvedev nominated Mikhail Fedotov, secretary of Russia’s Union of Journalists, to replace her.

At the beginning of the year, Medvedev organized a new North Caucasus federal district, comprising six republics and one territory, and appointed Aleksandr Khloponin as his special envoy there. Khloponin, a successful businessman and former governor in Siberia who had no links to the North Caucasus, was tasked with promoting economic development. The move reflected a new policy of using economic means to try to resolve the problems of the impoverished region, which remained racked by Islamist and separatist violence. The violence moved beyond the North Caucasus in March when two female suicide bombers from the region killed 40 people in explosions in two Moscow subway stations—the first such attacks in Moscow in six years.

During the year Medvedev attempted to tighten central control over regional leaders. In addition to replacing the governor of Kaliningrad, he replaced the long-established presidents of Tatarstan, Bashkortostan, and Kalmykiya. In September he sacked the mayor of Moscow, Yury Luzhkov, who had been in office since 1992. The case was significant in that Luzhkov attempted to split the tandem by appealing, unsuccessfully, to Putin over Medvedev’s head. He was replaced by Sergey Sobyanin, formerly head of Putin’s staff.

In other domestic news, Russia eliminated 2 of its 11 time zones in March. A population census was held in October; for the first time since 1995, there had been a net increase in Russia’s population. In December Russia won its bid to host the 2018 World Cup association football (soccer) tournament.

Economy

Russia had been one of the countries hardest hit by the global economic crisis, but its economy began to emerge from recession in late 2009; this trend continued in 2010 as world energy prices rose and the economies of other leading countries revived. Russia’s recovery remained somewhat uncertain, but GDP in 2010 was expected to be about 4% higher than the 2009 level. Inflation continued to fall, and unemployment also declined, although, at 8%, it remained above precrisis levels. As it exited the crisis, Russia’s economy faced a new environment. The economic recovery of some of the country’s important trading partners in Europe was even more uncertain than Russia’s. Russian companies accordingly were unable to borrow as freely abroad as they once had. Moreover, oil prices, while higher than they had been at the depth of the crisis, still remained below the peak prices of the summer of 2008.

While both Putin and Medvedev spoke of the need to modernize and diversify the economy, Medvedev made modernization the keynote of his presidency. In March the president announced plans to build an advanced technology centre, dubbed “Russia’s Silicon Valley,” at Skolkovo, near Moscow. Anatoly Chubais, Russia’s most effective state economic manager, was a driving force behind the project, which aimed to attract foreign investment and foster research-and-development cooperation with Western businesses. Supporters stressed that Western high-tech companies—notably Siemens, Europe’s largest electronics and electrical engineering conglomerate—had agreed to help fund the development and that Russian business also was directly involved. For skeptics, though, Skolkovo was a state-led top-down project with little chance of long-run success.

Medvedev also announced his goal of making Moscow a global financial centre, particularly through the more widespread use of the ruble in international transactions. He aimed to open up Russian capital markets to foreign firms through the issuance of shares and bonds denominated in rubles and traded on Russian markets. Veteran politician Aleksandr Voloshin, who had headed the presidential administrations of both Boris Yeltsin and Putin, was charged with realizing Medvedev’s ambition. The project was hindered, however, by the dependence of the Russian ruble on world oil prices, as a result of which the currency was not widely regarded as reliable in its own right.

In July the government announced plans to raise about 1.8 trillion rubles (roughly $59 billion) by selling minority stakes in 11 state-run firms. This sale of state assets, Russia’s biggest since the postcommunist sell-off of the 1990s, would include stakes in banking leaders Sberbank and Vneshtorgbank and oil giant Rosneft. While the state would retain a controlling interest in all the firms, the move was remarkable because its scale was—with the exception of Chubais’s privatization of Russia’s electricity giant—without recent precedent. The move was interpreted as an attempt to plug the budget deficit, which had ballooned during the economic crisis after years of surpluses.

Russia’s prospects of joining the WTO were shaken by the tandem’s conflicting statements on the matter. Putin claimed that Russia should give priority to forming a customs union with Kazakhstan and Belarus and that, once the union was established, the three states should join the WTO as a single unit. Medvedev argued that Russia should join the WTO on its own. After some initial wobbles caused by disagreements between Russia and Belarus, the proposed customs union entered into effect on July 5. Subsequently, Putin’s announcement that import duties on automobiles would be raised—an effort to promote the domestic assembly of cars by foreign manufacturers—raised doubts about whether Russia was serious about joining the WTO at all. Other obstacles to accession included the high level of state support for Russian agriculture, the poor protection afforded by Russian law to intellectual property rights, and disparities in technical standards relating to food and livestock imports.

The summer heat wave had damaging consequences for agriculture. As a result, the grain harvest was predicted to be 60 million–65 million metric tons, down from previous years’ harvests of roughly 100 million metric tons. As grain prices began to soar, Putin imposed a ban on grain exports until the end of the year and most likely longer; he hoped to hold down domestic grain prices and to prevent shortages at home. Even so, food prices rose in the late summer and early autumn—a time that usually saw a seasonal decline in prices.

Putin and Medvedev appeared to differ not only on the ban on grain exports but also on the president’s call to dismantle recently established state corporations, most of which had been set up in 2007, the last year of Putin’s presidency. Medvedev called for the corporations to either be converted into regular joint-stock companies or be liquidated, but the process was to be spread over several years.

Foreign Affairs

The “reset” in U.S.-Russian relations, which had begun after U.S. Pres. Barack Obama took office, resulted in an increasingly cooperative relationship between the two countries. In January Russia resumed its military cooperation with NATO, which had been suspended after the 2008 war with Georgia. In April Presidents Medvedev and Obama signed a nuclear arms control treaty (“New START”), which sought to cut each side’s nuclear arsenal to 1,550 deployed warheads and to introduce new verification procedures. In late December, after the U.S. Senate voted to ratify the treaty, the lower house of the Russian parliament also approved its first reading. In June Russia voted for new UN sanctions against Iran—a U.S. priority. Later that month Medvedev visited California’s Silicon Valley, where he met with Apple’s Steve Jobs and top executives from Twitter, Cisco, and Google to discuss ways of attracting investment. From there he went to Washington, D.C., where a friendly “burger diplomacy” lunch with Obama contrasted sharply with the often tense summits of the Cold War era. The positive relationship survived the June breakup of a network of 10 Russian sleeper spies by the FBI.

The U.S.-Russia “reset” reflected a broader shift in Russian foreign policy. In May the magazine Russky Newsweek published what it described as the draft of a new foreign policy doctrine, which called for Russia to shift its focus toward alliances with the United States and other Western countries in a bid to facilitate Russia’s economic and technological modernization. The clearest sign of a change in Russian policy was the improvement of Russia’s relations with Poland. On April 7 the Russian and Polish prime ministers participated in a joint ceremony in remembrance of the some 22,000 Poles who were massacred by Soviet forces at Katyn (near Smolensk) in 1940. Later, in November, the Russian parliament broke more than half a century of official reluctance by admitting that Soviet leader Joseph Stalin had ordered the Katyn Massacre. On May 9 troops from the U.S., Poland, France, and the U.K. commemorated the end of World War II by marching for the first time in Russia’s annual Victory Day parade through Red Square. In a further sign of rapprochement between Russia and the West, Medvedev attended NATO’s November summit in Lisbon, where Russia was invited to join a missile-defense system.

Military reform continued, though at a slower pace than originally promised. As part of the reform, a new system of military districts was introduced at the end of 2010. The six existing military districts were merged into four “operational-strategic” commands—West, East, Centre, and South. Strategic nuclear forces remained under central control.